What obligation does the guarantor have regarding Article 7 of the Boulder Designs Franchise Agreement?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
I will comply with all of the provisions contained in Article 7 of the Franchise Agreement concerning the use of the Confidential Information.
I will maintain the confidentiality of all Confidential Information disclosed to me.
I agree to use the Confidential Information only for the purposes authorized under the Franchise Agreement.
I further agree not to disclose any of the Confidential Information, except (a) to the Franchisee's employees on a need to know basis, (b) to the Franchisee's and my legal and tax professionals to the extent necessary for me to meet my legal obligations, and (c) as otherwise may be required by law.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Boulder Designs Franchise Disclosure Document, a guarantor who is also an owner of the franchisee has specific obligations regarding confidential information as outlined in Article 7 of the Franchise Agreement. The guarantor must comply with all provisions in Article 7 concerning the use of confidential information, maintain the confidentiality of all confidential information disclosed to them, and only use the confidential information for authorized purposes under the Franchise Agreement. They must not disclose any confidential information, except to the franchisee's employees on a need-to-know basis, to the franchisee's and their own legal and tax professionals to the extent necessary for meeting legal obligations, or as otherwise required by law. This ensures that trade secrets and other sensitive information of Boulder Designs are protected.
This obligation is significant because it extends the responsibility for maintaining confidentiality beyond just the franchisee to any owner who guarantees the agreement. This is a common practice in franchising, especially when the franchisee is a business entity, to ensure that individuals with a vested interest in the franchise are also bound by the confidentiality terms. By agreeing to these terms, the guarantor acknowledges that Boulder Designs would not have entered into the Franchise Agreement without this guarantee.
Should the guarantor fail to uphold these confidentiality obligations, Boulder Designs could pursue legal action to protect its trade secrets and confidential information. The guarantor's agreement to comply with Article 7 is a critical component of the franchise agreement, designed to safeguard the Boulder Designs system and brand. This protection extends not only during the term of the franchise agreement but also potentially after its termination, depending on the specific terms outlined in Article 7, which are not detailed in this excerpt.